10-K - Edison International

supply for operating the Mohave plant after 2005. If reasonable assurance of an adequate coal supply isnot obtained, it will become necessary to shut down the Mohave plant after December 31, 2005.Discontinued OperationsInformation about SCE’s discontinued operations appears in Note 12 of Notes to Financial Statementsand is incorporated herein by this reference.SeasonalityDue to warmer weather during the summer months, electric utility revenue during the third quarter ofeach year is generally significant higher than other quarters.Environmental MattersSCE is subject to environmental regulation by federal, state and local authorities in the jurisdictions inwhich it operates in the United States. This regulation, including the areas of air and water pollution,waste management, hazardous chemical use, noise abatement, land use, aesthetics, and nuclear control,continues to result in the imposition of numerous restrictions on SCE’s operation of existing facilities, onthe timing, cost, location, design, construction, and operation by SCE of new facilities, and on the cost ofmitigating the effect of past operations on the environment.SCE believes that it is in substantial compliance with environmental regulatory requirements and thatmaintaining compliance with current requirements will not materially affect its financial position orresults of operations. However, possible future developments, such as the promulgation of more stringentenvironmental laws and regulations, future proceedings that may be initiated by environmentalauthorities, and settlements agreed to by other companies could affect the costs and the manner in whichSCE conducts its business and could cause it to make substantial additional capital or operationalexpenditures. There is no assurance that SCE would be able to recover these increased costs from itscustomers or that SCE’s financial position and results of operations would not be materially adverselyaffected. SCE is unable to predict the extent to which additional regulations may affect its operations andcapital expenditure requirements.Typically, environmental laws and regulations require a lengthy and complex process for obtaininglicenses, permits and approvals prior to construction, operation or modification of a project. Meeting allthe necessary requirements can delay or sometimes prevent the completion of a proposed project as wellas require extensive modifications to existing projects, which may involve significant capital oroperational expenditures. Furthermore, if SCE fails to comply with applicable environmental laws, itmay be subject to injunctive relief, penalties and fines imposed by regulatory authorities.Air QualitySCE’s facilities, including in particular the Mohave plant located in Laughlin, Nevada, and theFour Corners plant located in the Four Corners area of New Mexico, are subject to various air qualityregulations, including the Federal Clean Air Act and similar state and local statutes.Mohave Consent Decree. In 1998, several environmental groups filed suit against the co-owners of theMohave plant regarding alleged violations of emissions limits. In order to resolve the lawsuit andaccelerate resolution of key environmental issues regarding the plant, the parties entered into a consentdecree, which was approved by the Nevada federal district court in December 1999. The decree alsoaddressed concerns raised by the US EPA programs regarding regional haze and visibility. As to regional7